EXHIBIT 2.1
DATED NOVEMBER 19, 2001
ALLIED HOLDINGS INC.
- and -
AUTOLOGIC HOLDINGS PLC
PROJECT APRICOT
AGREEMENT
- relating to -
THE SALE AND PURCHASE OF THE REMAINING
ISSUED SHARE CAPITAL OF ANSA LOGISTICS LIMITED, AUTOCAR
LOGISTICS LIMITED AND UP TO AN ADDITIONAL 32% OF
THE ISSUED SHARE CAPITAL OF VEHICLE
LOGISTICS CORPORATION BV
(LOGO)
Matter No: K0199/00336
A5/AJDH/TC/941569.02
CONTENTS
CLAUSE PAGE NO
1. INTERPRETATION 1
2. CONDITION 1
3. SALE AND PURCHASE OF TARGET SHARES 2
4. CONSIDERATION 2
5. DOCUMENTS TO BE DELIVERED ON SIGNING 2
6. PRE-COMPLETION MATTERS 2
7. COMPLETION 3
8. RESTRICTIONS ON SELLER'S BUSINESS ACTIVITIES 6
9. WARRANTIES 6
10. LIMITATION ON CLAIMS 7
11. CONFIDENTIALITY AND ANNOUNCEMENTS 8
12. FURTHER ASSURANCE AND AVAILABILITY OF INFORMATION 8
13. INTEREST 9
14. CONTINUING OBLIGATIONS AND ASSIGNMENT 9
15. COSTS 9
16. NOTICES 9
17. AGENT FOR SERVICE 10
18. SEVERABILITY 10
19. ENTIRE AGREEMENT AND VARIATION 10
20. GENERAL PROVISIONS 11
21. GOVERNING LAW AND JURISDICTION 11
22. COUNTERPARTS 11
23. THIRD PARTY RIGHTS 12
SCHEDULE 1 13
PART A 13
THE SELLER'S WARRANTIES 13
PART B 15
THE PURCHASER'S WARRANTIES 15
SCHEDULE 2 16
TAX COVENANT 16
SCHEDULE 3 23
INTERPRETATION 23
AGREED FORM DOCUMENTS:
Form of resignation of directors
Stock Transfer Forms
Written legal opinion
Irrevocable powers of attorney
Seller's Board Minutes
Purchaser's Board Minutes
Ansa Board Minutes
Autocar Board Minutes
ii
THIS AGREEMENT is made the 19th day of November 2001
BETWEEN:
(1) ALLIED HOLDINGS, INC. a corporation incorporated in the State of
Georgia whose principal office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "SELLER"); and
(2) AUTOLOGIC HOLDINGS PLC a company registered in England and Wales under
number 3252504 whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ (the "PURCHASER").
RECITALS:
(A) Autocar Logistics Limited is a company registered in England and Wales
under number 3712214 ("AUTOCAR") and Ansa Logistics Limited is a
company registered in England and Wales under number 3715126 ("ANSA")
both of whose registered offices are at Orion House, ▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and Vehicle Logistics Corporation BV is
a company registered in the Netherlands under number 20100984 ("VLC")
whose registered office is at 4906 ▇▇ ▇▇▇▇▇▇▇▇▇▇ (Noord-Brabant),
▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇. Autocar, Ansa and VLC are all joint venture
companies; in the case of Autocar and Ansa, beneficially owned equally
by the Transferring Shareholder and the Purchaser and, in the case of
VLC, beneficially owned as to 32% each by the Purchaser and the
Transferring Shareholder.
(B) The Seller has agreed to procure the sale of and the Purchaser has
agreed to purchase the Target Shares (as defined below) on and subject
to the terms of this Agreement.
IT IS AGREED:
1. INTERPRETATION
1.1 In this Agreement (including its recitals and Schedules), unless the
context otherwise requires, words and expressions have the meanings
ascribed to them in Schedule 3.
2. CONDITION
2.1 Completion is conditional upon the despatch of a circular to the
shareholders of the Purchaser and the passing at an extraordinary
general meeting of the Purchaser of a resolution to approve the
transactions contemplated by this Agreement. For the avoidance of
doubt, this condition is solely for the benefit of the Purchaser and
may be waived unilaterally by the Purchaser at any time at its
discretion.
2.2 The Purchaser shall use all reasonable endeavours to procure the
satisfaction of the condition set out in clause 2.1, including
dispatching the circular within 5 Business Days of the date of this
Agreement, which is to include a recommendation by the board of
directors of the Purchaser to the Purchaser's shareholders that they
approve the transaction contemplated by this Agreement provided that
nothing in this clause 2.2 shall require the directors' to act in
breach of their legal duties or to act otherwise than in the best
interests of the Purchaser.
2.3 If the condition specified in clause 2.1 has not been satisfied or
waived by the Purchaser by 6.00 pm (London time) on 15 December 2001,
then:
(a) this Agreement shall terminate and have no further effect
(subject only to this clause, clauses 11 (Confidentiality and
Announcements), 15 (Costs) and 21 (Governing Law and
Jurisdiction) which shall continue in force); and
(b) subject to any liability which may arise from any breach of
the obligations contained in this clause, the parties shall be
released from all liabilities and obligations hereunder save
in respect of any liability or breach arising prior to such
termination.
3. SALE AND PURCHASE OF TARGET SHARES
3.1 On and subject to the terms of this Agreement, the Seller shall procure
the sale by the Transferring Shareholder of, with full title guarantee,
the Target Shares and the Purchaser shall purchase all the Target
Shares on and with effect from the Effective Acquisition Date in each
case free from all charges, liens, equities, encumbrances, claims or
restrictions whatsoever and together with all rights which from the
Effective Acquisition Date, or at any time thereafter may have become
attached to them (including without limitation the right to receive all
dividends and distributions declared, made or paid on or after the
Effective Acquisition Date excluding the Pre-Sale Dividend which the
Transferring Shareholder shall be entitled to retain).
3.2 The Purchaser shall not be obliged to complete the purchase of any of
the Target Shares unless the sale to it of all the Target Shares is
completed simultaneously and if such sale is not completed on the
Completion Date then the Purchaser shall be entitled to rescind this
Agreement without liability of any kind on its part, but without
prejudice to its rights in respect of any pre-existing breach of the
terms hereof, including any breach giving rise to such right to
rescind.
4. CONSIDERATION
4.1 The total consideration payable by the Purchaser to the Seller shall be
the sum of US$20,560,001 which shall be paid in cash on Completion. The
total consideration shall be allocated as follows:
(a) US$20,200,000 for the Ansa Shares;
(b) US$360,000 for Autocar Shares; and
(c) US$1 for the VLC Shares.
4.2 On the date of this Agreement the form and terms of all documents
required to be signed or produced by the parties to this Agreement at
Completion in accordance with clause 7 other than the documents
referred to in clauses 7.2 and 7.6, shall have been agreed by the
parties and initialled as documents in the agreed form.
5. DOCUMENTS TO BE DELIVERED ON SIGNING
Immediately upon the signing of this Agreement, the Seller shall
deliver to the Purchaser, in the agreed form, a written legal opinion
from the Seller's in-house legal counsel stating that the execution of
this Agreement, any other documents substantially in the agreed form or
any agreement required in connection with clauses 7.9 and 12 by the
Seller and the performance by the Seller of its obligations under this
Agreement, any other documents substantially in the agreed form or any
other agreements required in connection with clauses 7.9 and 12 comply
with all of the requirements set out in the corporate by-laws of the
Seller and otherwise with all applicable laws of the State of Georgia
and Federal Laws of the United States binding upon the Seller.
6. PRE-COMPLETION MATTERS
6.1 Pending Completion the Seller undertakes that it shall procure that no
member of the Allied Group shall:
(a) take any action to prevent the businesses of each Target
Company being carried on in the ordinary and usual course in
accordance with the Purchaser's reasonable instructions; or
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(b) take any actions or permit any actions to take place which
would incur or increase the Seller's or the Transferring
Companies' liability under the Warranties had those Warranties
been repeated at Completion.
6.2 If at any time on or before Completion:
(a) the Seller fails to comply with all or any of its obligations
contained in this Agreement in a material way, whether to be
performed on or before Completion; or
(b) the Purchaser becomes aware of any fact or event which is a
material breach of any of the Seller's Warranties,
then the Purchaser may, by written notice given by it to the Seller,
elect to rescind this Agreement without prejudice to its remedies
against the Seller.
7. COMPLETION
7.1 Subject to the due satisfaction or waiver of the condition contained in
clause 2.1 and the Purchaser not having elected to rescind this
Agreement pursuant to the provisions of clauses 3.1 or 6 and the
provisions of this clause, Completion shall take place at the offices
of the Purchaser's Solicitors on the Completion Date or at such other
place and/or on such other date as may be agreed between the parties.
7.2 On Completion the Purchaser will procure that the Seller and the
Transferring Shareholder are released and discharged absolutely from
their obligations, covenants and undertakings to The Royal Bank of
Scotland plc and the Purchaser under the Principal Deed and First
Amendment Deed pursuant to the terms of the Deed of Release with effect
from Completion and will indemnify and keep the Seller and the
Transferring Shareholder indemnified from any obligations, covenants
and undertakings under the Principal Deed and First Amendment Deed with
effect from Completion.
7.3 On Completion the Seller shall, subject to compliance by the Purchaser
of its obligations under this Agreement (including specifically, its
obligations under clause 7.2), cause to be delivered to the Purchaser:
(a) duly executed transfers of the Autocar Shares and the Ansa
Shares by the registered holders thereof in favour of the
Purchaser (or as it may direct), together with the share
certificate relating to such shares;
(b) a certified copy of the minutes of the board of directors of
the Seller authorising the execution by the Seller of this
Agreement and any associated documents required to complete
and fulfil the transactions contemplated by this Agreement;
(c) written resignations (with effect from Completion) of each
director appointed by the Transferring Shareholder to each of
Ansa and Autocar, resigning from their respective offices and
employments with each of Ansa and Autocar, in each case
executed as deeds in the agreed terms; and
(d) irrevocable powers of attorney in the agreed form executed by
each of the holders of the Ansa Shares and Autocar Shares in
favour of the Purchaser appointing the Purchaser to be its
lawful attorney in respect of the Target Shares.
7.4 On Completion, the Purchaser shall cause to be delivered to the Seller
a certified copy of the minutes of the board of directors of the
Purchaser, authorising the execution by the Purchaser of this Agreement
and any associated documents required to complete and fulfil the
transactions contemplated by this Agreement.
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7.5 On Completion the Seller and the Purchaser shall cause a Board Meeting
of Ansa and Autocar to be duly convened and held at which:
(a) the said transfers of the Ansa Shares and Autocar Shares shall
be approved for registration (subject only to the transfers
being duly stamped at the cost of the Purchaser); and
(b) acceptance of the resignations of each director or officer
appointed by the Transferring Shareholder to each Target
Company.
7.6 On Completion the parties shall co-operate with the execution of a
notarial deed of transfer of the Target Shares in VLC in the agreed
form, executed before Mr P H N ▇▇▇▇▇ or any other duly appointed civil
notary in Amsterdam, the Netherlands.
7.7 On Completion the Purchaser shall, subject to compliance by the Seller
with its obligations under this Agreement, pay the sum of US$20,560,001
(in immediately available cleared funds) into the Seller's Solicitors
client account in full satisfaction of the consideration payable to the
Seller for the Target Shares and the receipt by the Seller's Solicitors
of such sum shall be a full discharge to the Purchaser of its
obligations to pay the consideration thereunder.
7.8 At Completion, the obligations of the parties under the Tax Covenant
shall take effect.
7.9
(a) Other than in respect of any rights arising under or in
connection with this Agreement or under the Confidentiality
Agreement or any of the agreed form documents:
(i) the Seller (on behalf of itself and all members of
the Allied Group) undertakes to the Purchaser (for
itself and on behalf of the AutoLogic Group) that as
at the date hereof neither it nor any member of the
Allied Group has any Claims against any member of the
AutoLogic Group and to the extent that there are any
such Claims as at the date hereof, the Seller (on
behalf of itself and all members of the Allied Group)
hereby waives all such Claims; and
(ii) the Purchaser (on behalf of itself and all members of
the AutoLogic Group) undertakes to the Seller (for
itself and on behalf of the Allied Group) that as at
the date hereof neither it nor any member of the
AutoLogic Group has any claims against any member of
the Allied Group and to the extent there are any such
Claims as at Completion, the Purchaser (on behalf of
itself and all members of the AutoLogic Group) hereby
waives all such Claims.
(b) Without prejudice to clause 11, to the extent that there are
any Assets owned or controlled by the Seller or any member of
the Allied Group after Completion, then the Seller will
execute and deliver or will procure the execution and delivery
of all such deeds of transfer (for nominal consideration) and
releases in favour of the Target Companies as the Purchaser
may reasonably require.
(c) The Seller undertakes that it will not and procure that no
member of the Allied Group will make any claim after
Completion against the Purchaser or the Target Companies in
respect of any intellectual property or intellectual property
rights owned or controlled by the Seller or any member of the
Allied Group which were used in the businesses of any of the
Target Companies prior to Completion.
7.10 The Seller (for itself and on behalf of each member of the Allied
Group) acknowledges receipt of the Pre-Sale Dividend and agrees that
none of the Target Companies shall have any liability whatsoever to the
Seller or any member of the Allied Group in relation to any further
payments in respect of the Pre-Sale Dividend.
4
7.11 The Purchaser acknowledges with effect from the Effective Acquisition
Date, that no member of the Allied Group shall have any obligation or
liability in respect of any obligation of or relating to any Target
Company in relation to the following:
(a) to Ford Motor Company for restructuring costs;
(b) any capital expenditure to be incurred by the Target
Companies;
(c) any requirement to fund management incentive arrangements to
any employees or consultants of the Target Companies; and
(d) any obligation to fund trading losses of any Target Companies.
7.12 Notwithstanding any other provision of this Agreement,
(a) it is acknowledged by the parties to this Agreement that the
VLC Shares to be transferred to the Purchaser pursuant to this
Agreement are subject to pre-emption provisions contained in
VLC's articles of association;
(b) if waivers of pre-emption or consents to the transfer of all
of the VLC Shares to the Purchaser from each of the current
shareholders of VLC (other than the Purchaser) are not
obtained on or before the Completion Date, then the Seller
will procure the issue of an effective transfer notice in
accordance with the provisions of the articles of association
of VLC by the Transferring Shareholder in respect of the VLC
Shares on or before Completion and the Seller undertakes that
it shall not withdraw or amend such transfer notice once it
has been given;
(c) the Purchaser shall purchase at the earliest time permitted by
the articles of association of VLC that number of shares in
VLC which it is entitled so to purchase in accordance with the
VLC articles of association;
(d) following the completion of any pre-emption offers pursuant to
VLC's articles of association the Seller will sell to the
Purchaser and the Purchaser will purchase any remaining VLC
shares not taken up by other existing shareholders of VLC
pursuant to the pre-emption offers and the consideration paid
pursuant to clause 4.1(c) shall be deemed to include the
consideration for any VLC shares purchased pursuant to this
clause;
(e) the Purchaser agrees that the Seller shall be under no
obligation to transfer to it any of the VLC Shares, which are
transferred to any of VLC's other existing shareholders on
acceptance of the pre-emption offers pursuant to the
pre-emption provisions in VLC's articles of association;
(f) to the extent that any VLC shares are transferred to any other
shareholder in VLC in accordance with the foregoing provisions
of this Clause, the Purchaser shall have no claim against the
Seller or any member of the Allied Group in respect of such
VLC Shares or the failure of the Seller to procure the
transfer thereof to the Purchaser;
(g) the Purchaser acknowledges that if waivers of pre-emption
rights or consents to the transfer of the VLC Shares to the
Purchaser from each of the current shareholders of VLC are not
obtained on or before the Completion Date, it shall remain
obliged to complete the purchase of the Ansa Shares and
Autocar Shares in accordance with this Agreement and shall not
be entitled to rescind this Agreement without any liability of
any kind on its part; and
(h) the Seller undertakes to the Purchaser that in any event it
will procure the transfer to the Purchaser of not less than
14,745 ordinary shares in VLC on or before 26 March 2001.
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8. RESTRICTIONS ON SELLER'S BUSINESS ACTIVITIES
8.1 SELLER'S COVENANTS
The Seller covenants with the Purchaser that the Seller shall not, and
shall procure that no member of the Allied Group shall (or shall
procure or assist any third party to) do any of the foregoing without
the consent of the Purchaser:
(a) at any time during the period of 24 months immediately
following Completion, be engaged or directly or indirectly
interested in carrying on any business (except as the owner
for investment of securities dealt in on a stock exchange and
not exceeding 10 per cent in nominal value of the securities
of that class) to the extent that it competes with the
Restricted Business within the Restricted Territories; or
(b) at any time during the period of 24 months immediately
following Completion solicit the employment or engagement of
any Key Person or solicit the employment or engagement of a
material number of employees of any of the Target Companies
except for those who answer a public advertisement or those
who are first approached when they are no longer employed by a
Target Company or a member of the AutoLogic Group; or
(c) at any time use for trading purposes the names "Autocar",
"Ansa" or "VLC" or any name likely to cause confusion
therewith; or
(d) at any time after Completion represent itself or permit itself
to be held out as being in any way connected with or
interested in the business of any Target Company.
8.2 The Seller covenants with the Purchaser that the Seller shall not, and
shall procure that no member of the Allied Group shall (or shall
procure or assist any third party to) compete (which shall include, for
the avoidance of doubt, tendering or submitting any proposal) with the
Purchaser or any member of the AutoLogic Group in relation to the
replacement, renewal or extension of any existing Ford Motor Company
contract currently operated by any of the Target Companies during, in
relation to each such Ford Motor Company contract, the current term of
that contract and for a period ending on the date falling 6 months
after the date of termination of that contract or 1 October 2004,
whichever is earlier.
8.3 UNDERTAKINGS SEPARATE
Each covenant in this clause 8 shall be construed as a separate
covenant. If one or more of the covenants is held to be void or
unenforceable, the validity of the remaining covenants shall not be
affected and, to the extent that any covenant or part thereof is or
would be held to be unenforceable but would be enforceable had part of
such covenant been deleted or the period, geographical extent or range
of business operations covered by such covenant been reduced then such
covenant shall apply with such modifications as shall be necessary so
as to render such covenant enforceable to the maximum extent permitted
by law.
8.4 DEFINITIONS IN THIS CLAUSE:
In this clause 8 the following words and expressions shall have the
following meanings:
"KEY PERSON" means any employee of a Target Company earning in excess
of(pound)50,000 per annum;
"RESTRICTED TERRITORIES" means the territories in which the relevant
Target Company conduct business as at the date of this Agreement; and
"RESTRICTED BUSINESS" means the distribution of new vehicles
manufactured by Ford Motor Company.
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9. WARRANTIES
9.1 The Seller hereby warrants to the Purchaser in the terms of the
Warranties set out in part A of Schedule 1. The Purchaser hereby
warrants to the Seller in the terms of the Warranties set out in part B
of Schedule 1.
9.2 Each of the Warranties set out in each paragraph and each paragraph of
Schedule 1 shall be separate and independent and shall not be limited
by reference to any other paragraph or anything in this Agreement or
the Schedules.
9.3 Where any statement set out in Schedule 1 is expressed to be given or
made to the best of the Seller's knowledge or is qualified by reference
to the Seller's awareness or is qualified in some other manner having
substantially the same effect, the Seller's undertake that all
reasonable enquiries prior to the date hereof in respect of the subject
matter of the relevant statement have been made of all members of the
Allied Group, but in the event that all such reasonable enquiries have
not been made such statement shall not be deemed to include such
knowledge or awareness expression or qualification.
9.4 The Warranties shall be deemed to be given at the date of this
Agreement and shall not be deemed to be repeated at any other time.
9.5 Each party has entered into this Agreement on the basis of the
Warranties given by the other and in reliance on them. Liability under
any Warranty shall not be confined to breaches discovered before
Completion nor in any way be modified or discharged by Completion.
9.6 The Seller agrees with the Purchaser (for itself and on behalf of each
Target Company and each member of the AutoLogic Group and their
respective officers and employees) that neither it nor any member of
the Allied Group has relied on any warranty, except for the Warranties
set out in Part B of Schedule 1, or representation by or on behalf of
any member of the AutoLogic Group or any of the Target Companies or any
of their respective directors, officers, employees, agents or advisers
in connection with this Agreement or the subject matter hereof.
10. LIMITATION ON CLAIMS
10.1 The Seller shall have no liability in respect of any breach or
non-fulfilment of any of the Warranties given by it unless the
Purchaser has served on the Seller a written notice on or before 31
December 2002 after Completion giving a detailed description of the
nature of the breach in question.
10.2 The aggregate amount of the liability of the Seller for all Warranty
Claims or claim(s) under clause 2 of the Tax Covenant shall not exceed
US$20,560,001.
10.3 The Seller shall not be liable for any Warranty Claim to the extent
that the Purchaser or any directors of the Target Companies appointed
by the AutoLogic Group had actual knowledge at the date of this
Agreement of any specific fact, matter, event or circumstance which it
or they knew would give rise to a Warranty Claim.
10.4 If the Seller pays to the Purchaser an amount in discharge of a
Warranty Claim for breach of Warranty or an amount in discharge of a
claim under the Tax Covenant and the Purchaser or the Target Companies
subsequently recover from a third party (including any Tax authority) a
sum which is referable to the matter giving rise to the Warranty Claim
or a claim under the Tax Covenant the Purchaser shall (or, as
appropriate, shall procure that the Target Company shall) as soon as
reasonably practicable once it or the Target Company has received such
amount and only after it or the Target Company has recovered the full
amount of its loss in respect of such matter repay to the Seller:
(a) the actual amount recovered from the third party after
deducting an amount equal to the costs and expenses incurred
by the Purchaser or any Target Company in recovering the same
and any tax suffered on the receipt; or
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(b) if the figure resulting under paragraph (a) above is greater
than the amount paid by the Seller to the Purchaser or the
Target Company in respect of the relevant Warranty Claim or
claim under the Tax Covenant, such lesser amount as shall have
been so paid by the Seller.
10.5 The Purchaser agrees for itself and on behalf of the Target Companies
with the Seller that each of them shall not be entitled to recover
damages or obtain payment, reimbursement, restitution or indemnity in
excess of their total loss in respect of any shortfall, damage,
deficiency, breach or other set of circumstances which gives rise to
one or more Warranty Claims, and for this purpose recovery by the
Purchaser or the Target Companies shall be deemed to be a recovery by
each of them.
10.6 The limitations on the liability of the Seller set out in this clause
10 shall not apply to any Warranty Claim if the matter or claim
involves fraud or wilful non-disclosure on the part of the Seller or
any member of the Allied Group on or prior to the entry into of this
Agreement or Completion.
10.7 It is acknowledged by the parties to this Agreement that any allocation
of consideration set out in this Agreement shall not limit in any way
the Purchaser's right to claim up to US$20,560,001 for breach or
non-fulfilment of any of the Warranties.
11. CONFIDENTIALITY AND ANNOUNCEMENTS
11.1 For the purpose of assuring the full benefit of the business and
goodwill of each Target Company and in consideration of the Purchaser
agreeing to buy the Target Shares on the terms of this Agreement, the
Seller agrees with the Purchaser and its successors in title as a
separate and independent agreement that, save as provided in clause
11.2, it will not (and will procure that no member of the Allied Group
shall) divulge (other than in accordance with clause 11.3) any
Confidential Business Information.
11.2 The Allied Group may disclose or permit the disclosure of Confidential
Business Information:
(a) to its officers, employees, legal or other professional
advisers, subject to them holding the information under a
similar duty of confidentiality, to the extent necessary to
enable it or them to perform or cause to be performed or to
enforce any of its rights or obligations under this Agreement;
(b) to the extent that the Confidential Business Information has
become publicly available or is or has been in the public
domain at the time of such disclosure otherwise than as a
result of a breach of this clause; and
(c) when required to do so by law or any order of court, but only
to the extent so required.
11.3 No announcement or statement about this Agreement or the subject matter
of, or any matter referred to in, this Agreement shall be made or
issued before, on or after Completion by or on behalf of any of the
parties without the prior written approval of the other parties (such
approval not to be unreasonably withheld or delayed once such
information shall have become public other than by breach of this
Agreement) PROVIDED that nothing shall restrict the making by the
Purchaser (even in the absence of agreement by the other parties) of
any statement or announcement which may be required by law or which is
in compliance with the requirements of the UK Listing Authority and
FURTHER PROVIDED that nothing shall restrict the making by the Seller
(even in the absence of agreement by the other parties) of any
statement or announcement which may be required by law, the Securities
and Exchange Commission and/or the New York Stock Exchange.
12. FURTHER ASSURANCE AND AVAILABILITY OF INFORMATION
12.1 The Seller shall execute and deliver all such instruments and other
documents as the Purchaser may from time to time reasonably require in
order to give full effect to the provisions of this Agreement and
secure to the Purchaser the full benefit of the rights, powers and
remedies conferred upon the Purchaser in this Agreement.
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12.2 The Seller shall take (for a period of 6 months after Completion) any
such other actions as the Purchaser may from time to time reasonably
request to secure the goodwill of the Target Companies, such action to
include (but without limitation):
(a) joint communications with the Purchaser on behalf of the
Target Companies to any of their existing customers or
suppliers; and
(b) joint approaches with the Purchaser on behalf of the Target
Companies to any of their existing customers or suppliers,
to ensure so far as possible the smooth transition of ownership of the
Target Companies to the Purchaser and the maintenance of goodwill and
customer relationships and contacts. Provided that (i) the Seller shall
not be required to do anything which is materially prejudicial to the
interests of the Allied Group and (ii) any such action taken by the
Seller shall be at the expense of the Purchaser so long as such expense
is agreed in advance by the Purchaser and the Seller.
12.3 The Seller shall cause to be made available to the Purchaser any
information to the extent it relates to the business and affairs of
each Target Company prior to Completion which the Purchaser may from
time to time reasonably require (before or after Completion) and which
is in the Seller's possession or under the Seller's control. Such
information shall be made available during business hours and following
reasonable notice to the Purchaser. The Seller shall permit the
Purchaser and its representatives to have access to such information
and at its own expense to take copies thereof.
12.4 The Purchaser shall cause to be made available to the Seller any
information to the extent it relates to the business and affairs of
each Target Company prior to Completion which the Seller may from time
to time reasonably require (before or after Completion) for the purpose
of preparing or clarifying any disputes or queries in relation to the
Seller's annual accounts, the audit of such accounts or its tax returns
or as required by any SEC filings to be made by the Seller and which is
in the Purchaser's or the Target Companies' possession or under the
Purchaser's or the Target Companies' control shall be made available,
during business hours and following reasonable notice, to the Seller.
The Purchaser shall permit the Seller and its representatives to have
access to such information and at its own expense to take copies
thereof.
13. INTEREST
If any amount required to be paid under this Agreement is not paid when
it is due, such amount shall bear interest at the rate of 3 per cent
per annum over the base lending rate of The Royal Bank of Scotland PLC
from time to time, calculated on a daily basis for the period from the
relevant due date for payment up to and including the date of actual
payment, as well after as before any judgment.
14. CONTINUING OBLIGATIONS AND ASSIGNMENT
14.1 Each of the obligations, warranties, representations, indemnities and
undertakings accepted or given by any party under this Agreement or any
document referred to herein shall continue in full force and effect
notwithstanding Completion taking place.
14.2 Neither party shall have the right to assign any benefit under this
Agreement. 15. COSTS
15.1 Each party shall pay its own costs and expenses in relation to the
negotiation, preparation, and implementation of this Agreement (and the
documents referred to herein), including the fees and disbursements of
their respective legal, accountancy and other advisers.
9
16. NOTICES
16.1 Any notice or other communication to be given under this Agreement
shall be in writing, shall be deemed to have been duly served on, given
to or made in relation to a party if it is left at the authorised
address of that party, posted by pre-paid airmail addressed to that
party at such address, or sent by fax transmission to a machine
situated at such address and shall if:
(a) personally delivered, be deemed to have been received at the
time of delivery;
(b) posted to an inland address in the United Kingdom, be deemed
to have been received on the second Business Day after the
date of posting and if posted to an overseas address, be
deemed to have been received on the fifth Business Day after
the date of posting; or
(c) sent by fax transmission, be deemed to have been received upon
receipt by the sender of a fax transmission report (or other
appropriate evidence) that the notice or communication has
been transmitted to the addressee,
PROVIDED that where, in the case of delivery by hand or fax
transmission, delivery or transmission occurs after 6.00 pm on a
Business Day or on a day which is not a Business Day, receipt shall be
deemed to occur at 9.00 am on the next following Business Day.
16.2 For the purposes of this cause the authorised address of each party
shall be the address set out at the heading of this Agreement or such
other address as that party may notify to the others in writing from
time to time in accordance with the requirements of this clause.
17. AGENT FOR SERVICE
17.1 The Seller irrevocably agrees that any notice or document may be
sufficiently and effectively served on it in connection with
Proceedings in England and Wales by service on ▇▇▇▇▇▇ ▇▇▇▇▇ Sapte, ▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ (ref: SJG 46120.00002), if no
replacement agent has been appointed and notified to the Purchaser
pursuant to clause 17.3, or on the replacement agent if one has been so
appointed and notified by the Purchaser.
17.2 If the agent referred to in clause 17.1 (or any replacement agent
appointed pursuant to this clause) at any time ceases for any reason to
act as such, the Seller shall appoint a replacement agent to accept
service having an address for service in England and Wales and shall
notify the other party of the name and address of the replacement
agent.
17.3 In respect of the Seller failing such appointment and notification
contemplated in clause 17.2, the Purchaser shall be entitled by notice
to the Seller to appoint such a replacement agent to act on behalf of
the Seller PROVIDED that in cases where service is effected upon a
replacement agent appointed by the Purchaser in accordance with this
clause, a copy of the relevant notice or document shall at the same
time be forwarded to the last known business address of the Seller.
18. SEVERABILITY
18.1 If any provision of this Agreement (or of any document referred to
herein) is held to be illegal, invalid or unenforceable in whole or in
part in any relevant jurisdiction the legality, validity and
enforceability of the remaining provisions of this Agreement (or such
document) shall not in any way be affected or impaired thereby.
19. ENTIRE AGREEMENT AND VARIATION
19.1 Subject to clause 19.4, this Agreement (together with any documents
referred to herein) contains the entire agreement and understanding of
the parties and supersedes all prior agreements, understandings or
arrangements (both oral and written) (insofar as they are between the
parties) relating to the subject matter of this Agreement.
19.2 Each of the parties acknowledges and agrees that:
10
(a) it does not enter into this Agreement and the documents
referred to herein on the basis of and does not rely, and has
not relied, upon any statement or representation (whether
negligent or innocent) or warranty or other provision (in any
case whether oral, written, express or implied) made, given or
agreed to by any person (whether a party to this Agreement or
not) except those expressly set out or referred to in this
Agreement and the documents referred to herein and the only
remedy or remedies available in respect of any
misrepresentation or untrue statement made to it shall be a
claim for breach of contract under this Agreement; and
(b) this clause 19.2 shall not apply to any statement,
representation or warranty made fraudulently or to any
provision of this Agreement which was induced by, or otherwise
entered into as a result of, fraud, for which the remedies
shall be all those available under the law governing this
Agreement.
19.3 No variation, supplement, deletion or replacement of or from this
Agreement or any of its terms shall be effective unless made in writing
and signed by or on behalf of each party.
19.4 Notwithstanding any other provision of this Agreement, the
Confidentiality Letter dated 5 April 2000 between the Seller and the
Purchaser shall remain in full force and effect in accordance with its
terms, save insofar as it relates to matters contemplated by this
Agreement. The parties agree that this Agreement and the matters
contemplated by it shall not be deemed a "Possible Transaction" for the
purposes of the Confidentiality Letter.
20. GENERAL PROVISIONS
20.1 Time shall be deemed to be of the essence in this Agreement.
20.2 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed to be a waiver of any subsequent
breach or default and shall in no way affect the other terms of this
Agreement.
20.3 No failure to exercise and no delay on the part of any party in
exercising any right, remedy, power or privilege of that party under
this Agreement and no course of dealing between the parties shall be
construed or operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights and remedies provided by this
Agreement are cumulative and are not exclusive of any rights or
remedies provided by law.
21. GOVERNING LAW AND JURISDICTION
21.1 This Agreement (together with all documents to be entered into pursuant
to it which are not expressed to be governed by another law) shall be
governed by, construed and take effect in accordance with English law.
21.2 The courts of England shall have exclusive jurisdiction to settle any
claim, dispute or matter of difference which may arise out of or in
connection with this Agreement (including without limitation claims for
set-off or counterclaim) or the legal relationships established by this
Agreement.
21.3 Each of the parties hereto agrees that in the event of any action
between any of the parties hereto being commenced in respect of this
Agreement or any matters arising under it, the process by which it is
commenced, (where consistent with the applicable court rules) may be
served on them in accordance with clause 17.1.
22. COUNTERPARTS
(a) This Agreement may be executed in any number of counterparts
and by the parties on separate counterparts, but shall not be
effective until each party has executed at least one
counterpart.
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(b) Each counterpart, when executed, shall be an original of this
Agreement and all counterparts shall together constitute one
instrument.
23. THIRD PARTY RIGHTS
The parties to this Agreement do not intend that any term of this
Agreement should be enforceable, by virtue of the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇, by any person who is not a party to this
Agreement save to the extent that members of the AutoLogic Group (with
the prior consent of the Purchaser) or members of the Allied Group
(with the prior consent of the Seller) may enforce any rights under
this Agreement which are expressly intended to be for their benefit
(including, without limitation, the Tax Covenant - but not the
Warranties). This clause and any of the provisions of this Agreement
may be amended, varied or abrogated by agreement between the Purchaser
and the Seller without the consent of any third party.
IN WITNESS THEREOF the hands of the parties or their duly authorised
representatives have executed this Agreement as a Deed the day and year first
above written.
12
SCHEDULE 1
PART A
THE SELLER'S WARRANTIES
THE TARGET COMPANIES AND THE TARGET SHARES
1. The Seller warrants to the Purchaser that:
(a) the Transferring Shareholder has full legal and beneficial
ownership of the Target Shares, owns such Target Shares free
of any liens, charges, mortgages or other encumbrances of any
kind whatsoever, sells such Target Shares with full title
guarantee and has full and unencumbered power and authority to
sell such Target Shares in accordance with the terms of this
Agreement;
(b) neither the Transferring Shareholder nor the Seller has
committed any Target Company, nor are they aware of any other
person or entity within the Allied Group or acting on their
behalf having committed any Target Company, to any obligation
or obligations, or having increased any existing obligations
other than those approved at a duly convened Board Meeting of
the Target Company;
(c) neither the Transferring Shareholder nor the Seller are aware
of any litigation (other than any litigation which has been
disclosed at a duly convened Board Meeting of a Target
Company) that is current, pending or threatened against any of
the Target Companies which could in any such case have a
material effect on the financial condition of any Target
Company; and
(d) neither the Transferring Shareholder nor the Seller have held
themselves out, nor are they aware of any director appointed
by it to the Target Companies as having held themselves out as
representing the Target Companies other than with the prior
approval of a duly convened Board Meeting of the Target
Company.
2. The Seller warrants to the Purchaser that:
(a) it has the requisite power and authority to enter into and
perform this Agreement and the other documents which are to be
executed by it in connection herewith (the "SELLERS'
COMPLETION DOCUMENTS");
(b) this Agreement constitutes and the Sellers' Completion
Documents will, when executed by the Seller , constitute
binding obligations of the Seller in accordance with their
respective terms; and
(c) the execution and delivery of and the performance of the
Seller of its obligations under this Agreement and the
Sellers' Completion Documents will not:
(i) result in a breach of any existing order, judgment or
decree of any court applicable to the Seller or the
Transferring Company;
(ii) result in a breach of any rules or regulations of any
governmental agency or regulatory body by which the
Seller or the Transferring Company is bound; or
(iii) other than as contemplated by this Agreement, require
the Seller or the Transferring Company to obtain any
consent or approval of, or give any notice to or make
any registration with, any governmental or other
authority which has not been obtained or made at the
date hereof.
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PART B
THE PURCHASER'S WARRANTIES
1. The Purchaser warrants to the Seller that:
(a) it has the requisite power and authority to enter into and
perform this Agreement and the other documents which are to be
executed by it in connection herewith (the "PURCHASERS'
COMPLETION DOCUMENTS");
(b) this Agreement constitutes and the Purchasers' Completion
Documents will, when executed by the Purchaser, constitute
binding obligations of the Purchaser in accordance with their
respective terms; and
(c) the execution and delivery of and the performance of the
Purchaser of its obligations under this Agreement and the
Purchasers' Completion Documents will not:
(i) result in a breach of any existing order, judgment or
decree of any court applicable to the Purchaser;
(ii) result in a breach of any rules or regulations of any
governmental agency or regulatory body by which the
Purchaser is bound; or
(iii) other than as contemplated by this Agreement, require
the Purchaser to obtain any consent or approval of,
or give any notice to or make any registration with,
any governmental or other authority which has not
been obtained or made at the date hereof.
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SCHEDULE 2
TAX COVENANT
1. DEFINITIONS
1.1 In this Schedule:
"ACCOUNTS" means the latest audited statutory accounts of the Target
Companies for the year ended 31 December 2000;
"ACCOUNTS RELIEF" means any Relief taken into account in computing and
so reducing or eliminating any provision for Tax (including deferred
Tax) which appears in the balance sheet in the Accounts as an asset;
"BALANCE SHEET DATE" means 31 December 2000;
"CLOSING BALANCE SHEET" means the balance sheet (agreed between the
Purchaser and the Seller) drawn up by the Target Companies' auditors to
30 September 2001 in accordance with the UK GAAP and prepared on a
consistent basis with accounting policies and practices of the Target
Companies;
"DEMAND" means any document issued or any claim made or action taken
whether before or after the date hereof by or on behalf of any person,
authority or body whatsoever (whether of the United Kingdom or
elsewhere in the world) from which it appears to the Purchaser or the
Target Company that the Target Company has or may have a Tax Liability;
"EVENT" means any transaction, act, event or omission of whatever
nature;
"INSTALMENT REGULATIONS" means the Corporation Tax (Instalment
Payments) Regulations 1998;
"POST-COMPLETION RELIEF" means any Relief which arises to the Purchaser
or to any Target Company as a consequence of any Event occurring or
from income, profits or gains arising after the Effective Acquisition
Date;
"RELIEF" means any relief, allowance, deduction in computing profits,
credit or right to repayment of Tax (including repayment supplement or
interest thereon) granted by or pursuant to any legislation or
otherwise for Tax purposes whether of the United Kingdom or elsewhere
in the world; and
"TAX" means any and all forms of taxes, levies, imposts, contributions,
duties and charges in the nature of taxation and all withholdings or
deductions in respect thereof of whatever nature whenever imposed
whether of the United Kingdom or elsewhere (including, for the
avoidance of doubt, National Insurance contribution liabilities in the
United Kingdom and corresponding obligations elsewhere) and whether
directly or primarily chargeable against, recoverable from or
attributable to any Target Company or any other person including all
fines, penalties, charges and interest relating to the same.
1.2 References to income or profits or gains shall include any other
measure by reference to which Tax is computed.
1.3 References to income or profits or gains earned, accrued, arising or
received by any person shall include income or profits or gains which
are for the purposes of any Tax treated as earned, accrued, arising to
or received by such person.
1.4 References to income or profits or gains earned, accrued, arising or
received on or before a particular date (including, without limitation,
the Effective Acquisition Date) or in respect of a particular period
15
shall include income or profits or gains which are for the purposes of
any Tax treated as earned or accrued, arising or received on or before
that date or in respect of that period.
1.5 References to the occurrence of Events on or before a particular date
(including, without limitation, the Effective Acquisition Date) or in
respect of a particular period shall include Events which are for the
purposes of any Tax treated as having occurred or existed at or before
that date or in respect of that period.
1.6 References to any Tax liability of any Target Company shall include:
(a) payments of or in respect of Tax by such Target Company since
the Balance Sheet Date and before the Effective Acquisition
Date;
(b) liabilities of such Target Company to make payments of or in
respect of Tax;
(c) the denial, loss, use or set off in whole or in part of any
Accounts Relief which would, but for such denial, loss, use or
set off, have been available to any Target Company after the
Effective Acquisition Date; and
(d) the use or setting off in whole or in part against income,
profits or gains earned, accrued, arising or received on or
before the Effective Acquisition Date, or Tax thereon, of any
Post-Completion Relief.
1.7 References in this Schedule to paragraphs are to paragraphs in this
Schedule unless otherwise stated.
2. COVENANT
2.1 Subject as hereinafter expressly provided, the Seller hereby covenants,
with effect from Completion, to pay (to the extent possible, by way of
reduction of the purchase price hereunder) to the Purchaser or, at the
Purchaser's direction, the relevant Target Company an amount equal to:
(a) any Tax liability of the Target Company arising in respect of
or as a consequence of any disallowance as a deduction in
calculating taxable profits or losses or re-characterisation
as a distribution or otherwise of any management charge paid
by any Target Company to any member of the Allied Group by any
taxation authority;
(b) without prejudice to 2.1(a) above, 50 per cent of any Tax
liability of Autocar or Ansa and 32 per cent of any Tax
liability of VLC arising in respect of or as a consequence of
any Event or Events occurring on or before the Effective
Acquisition Date or in respect of or by reference to any
income, profits or gains earned, accrued, arising or received
on or before the Effective Acquisition Date; and
(c) all (or, in relation to a Tax liability under 2.1(b) above,
the percentage relevant to that Tax liability mentioned in
2.1(b) (the "RELEVANT PERCENTAGE")) of the reasonable costs
and expenses properly incurred by the Purchaser and/or any
Target Company in connection with any such Tax liability of
the Target Company, or Demand from which it appears to the
Purchaser or the Target Company that any such Tax liability
may arise or has arisen, or in successfully taking or
defending any action under this covenant.
2.2 For the purposes of this covenant the amount of a Tax liability of the
Target Company falling within paragraph 1.6(c) or 1.6(d) of this
schedule shall be taken to be as follows:
(a) in the case of a Tax liability within paragraph 1.6(c):
16
(i) where such Accounts Relief is a right to repayment of
Tax, the amount of the Relief so denied, lost, used
or set off;
(ii) where such Accounts Relief is a deduction from or set
off against income, profits or gains, or Tax thereon,
the Tax that would otherwise have been saved for the
accounting period in which the Accounts Relief arose
but for such denial, loss, use or set off; or
(iii) if in such accounting period no Tax would otherwise
have been saved because of an insufficiency of
income, profits or gains, or Tax thereon, against
which such Accounts Relief could have been offset,
the Tax that would otherwise have been saved for the
accounting period or periods in which income, profits
or gains, or Tax thereon, arises or arose, against
which such Accounts Relief could have been offset but
for such denial, loss, use or set off,
and in either case 2.2(a)(ii) or 2.2(a)(iii), on the
assumption that the Accounts Relief in question would have
been offset in priority to any other Relief available in such
period or periods; and
(b) in the case of a Tax liability within paragraph 1.6(d), the
amount of Tax for which the Target Company would, but for such
use or setting-off, have been liable and in respect of which a
claim could have been made against the Seller under this
covenant.
3. LIMITATIONS AND EXCLUSIONS
3.1 In addition to paragraph 3.2, the Seller shall not be liable under the
covenants contained in paragraph 2.1 in respect of any Tax liability of
any Target Company:
(a) (subject to paragraph 3.3) unless the Purchaser has served on
the Seller a written notice on or before the seventh
anniversary of Completion Date notifying the Seller that it is
making a claim hereunder;
(b) to the extent that such Tax liability would not have arisen
but for any voluntary act or omission of the Purchaser or any
Target Company or any member of the Autologic Group at any
time on or after Completion which the Purchaser knew would
give rise to the Tax liability and which could reasonably have
been avoided, unless such act was carried out:
(i) pursuant to an obligation of the Target Company
incurred prior to the Completion Date; or
(ii) in compliance with any law, regulation or request of
any competent authority for Tax purposes; or
(iii) with the written agreement or at the written request
of the Seller; or
(iv) in the ordinary course of business of the Company or
the Purchaser; or
(c) arising in respect of or as a consequence of any disallowance
as a deduction in calculating taxable profits or losses or
re-characterisation as a distribution or otherwise of any
management charge paid by any Target Company to any member of
the Autologic Group by any taxation authority.
3.2 The Seller shall not be liable under the covenant contained in
paragraph 2.1(b) in respect of any Tax liability of any Target Company
in respect of ordinary trading activities to the extent that provision
or reserve was made in the Closing Balance Sheet in respect of such Tax
liability.
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3.3 The Seller shall not be liable in respect of any claim under this
covenant to the extent that recovery has been made in respect of the
subject matter thereof under the Warranties.
3.4 The limitations set out in paragraph 3.1(a) on the liability of the
Seller in relation to claims under this covenant shall not apply to any
claim which involves substantiated allegations, made by any competent
authority for Tax purposes, of any fraudulent act or omission or of any
wilful default or negligent conduct on the part of the Seller or any
member of the Allied Group prior to the Effective Acquisition Date.
4. CONDUCT OF CLAIMS
4.1 If the Purchaser becomes aware of any Demand the Purchaser shall give
notice to the Seller, with reasonably sufficient details of the Demand
and the potential Tax liability, as soon as reasonably practicable.
4.2 In relation to any Demand the Purchaser shall, and shall procure that
the relevant Target Company shall:
(a) take reasonable endeavours to keep the Seller fully informed
of material developments relating to the Demand;
(b) not transmit any material communication to any Tax authority
in relation to the Demand without first giving the Seller a
reasonable opportunity to comment and without taking account
of the Seller's reasonable comments; and
(c) not agree the amount of the relevant Tax liability without the
prior approval of the Seller (not to be unreasonably
withheld).
4.3 If any dispute arises between the Purchaser and the Seller as to
whether to agree the amount of any Demand, such dispute shall be
referred for determination to a Barrister, of at least 10 years call at
the English Bar with relevant experience, appointed by agreement
between the Purchaser and the Seller or (if they do not agree) upon the
application by either party to the President for the time being of the
Law Society, whose determination shall be final. The Barrister so
appointed shall be asked to advise whether, in his opinion, (acting as
an expert and not as an arbitrator), an appeal against the Demand
would, on the balance of probabilities, be likely to succeed and shall
be instructed, if the dispute relates to a Demand issued by a Tax
authority outside the United Kingdom, to obtain such advice from
professional advisers of the relevant jurisdiction as he thinks
necessary in order to arrive at his opinion, and also to determine how
the costs of obtaining his opinion should be allocated between the
parties hereto. If, but only if, such opinion is in the affirmative
shall an appeal be made and that Demand not then settled. Any further
dispute arising between the parties as to whether any further appeal
should be pursued following determination of an earlier appeal (whether
or not in favour of the Company) shall be resolved in a similar manner.
The Purchaser shall not be obliged to make any such appeal unless the
Seller shall indemnify and at the request of the Purchaser secure the
Purchaser and the Company to the Purchaser's satisfaction against the
relevant percentage of all losses, costs, interest, damages and
expenses and any further liability to Tax which may be incurred thereby
and provided that where the Tax liability which is the subject of the
Demand has to be paid before an appeal can be made the Purchaser shall
not be obliged to procure the Company to take any such action until the
Seller shall have paid to the Purchaser, or at its direction, the
Company, for the purpose of discharging the Tax liability, an amount
equal to the relevant percentage of the said liability. The Purchaser
shall have conduct of any such appeal subject to the Seller and
Purchaser having the same rights and obligations in relation to the
conduct of the appeal as in relation to a Demand under paragraph 4.2.
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5. PAYMENT OF CLAIMS
5.1 Payments by the Seller pursuant to the covenants in paragraph 2 shall
be made on the days specified in paragraph 5.2 below.
5.2 The days referred to in paragraph 5.1 are as follows:
(a) if the Tax liability giving rise to a claim under this
covenant involves an actual payment of Tax by any Target
Company, the day which is the later of five Business Days
after demand is made therefor by or on behalf of the
Purchaser, and three Business Days before the date on which
that Tax becomes due and payable to the relevant Tax
authority;
(b) if the Tax liability giving rise to a claim under this
covenant does not involve an actual payment of Tax:
(i) if involving the denial, loss, use or setting off in
whole or in part of an Accounts Relief which is a
right to repayment of Tax, the day which is the later
of five Business Days after demand is made therefor
by or on behalf of the Purchaser, and the day on
which such Tax would otherwise have been repaid;
(ii) if involving the denial, loss, use or setting off of
any other Accounts Relief within paragraph 2.2(a),
the day which is the later of five Business Days
after demand is made therefor by or on behalf of the
Purchaser, and the day on which the Tax that would
otherwise have been saved becomes due and payable to
the relevant Tax authority;
(iii) if involving the use or setting-off of any
Post-Completion Relief within paragraph 2.2(b) the
day which is the later of five Business Days after
demand is made therefor by or on behalf of the
Purchaser, and the day on which the Tax saved thereby
would otherwise have become due and payable to the
relevant Tax authority; and
(c) in any other case, three Business Days after the date on which
demand is made therefor by or on behalf of the Purchaser,
supported by reasonable evidence of the liability under
paragraph 2.
5.3 For the purposes of this paragraph 5, the date on which an amount of
corporation tax (the "CORPORATION TAX") does or would become due and
payable by a company, being a Target Company or the Purchaser (the
"RELEVANT COMPANY"), shall be determined to be:
(a) in any accounting period of the Relevant Company ending on or
after 1 July 1999 in which the Relevant Company is a "large
company" within the meaning of the Instalment Regulations, the
date or dates upon which the Corporation Tax would be provided
to be due and payable by Regulations 4 and 5 of the Instalment
Regulations on the assumption that the Corporation Tax payable
by the Relevant Company is the "total liability" of the
Relevant Company for that period within the meaning of the
said Regulations 4 and 5; or
(b) in any other accounting period of the Relevant Company, the
date which is nine months following the end of the accounting
period.
5.4 For the purposes of this paragraph 5, references to the day on which an
amount of Tax which is not UK corporation tax becomes due and payable
to the relevant Tax authority shall be the first day on which such Tax
is required by law to be paid without incurring any penalty or
liability for interest in respect thereof.
19
6. NO WITHHOLDINGS, ETC
6.1 All sums payable by the Seller under this Agreement shall be paid free
of and without any rights of counterclaim or set off, and without
deduction or withholding on any ground whatsoever, save only as may be
required by law. If any such deduction or withholding is required by
law the Seller shall be obliged to pay to the Purchaser or relevant
Target Company (the "CLAIMANT") such amount as will ensure that, after
any such deduction or withholding has been made, the Claimant shall
have received a sum equal to the amount that the Claimant would
otherwise have received in the absence of any such deduction or
withholding, as reduced by any credit to which the Claimant may be
entitled on account of such deduction or withholding.
6.2 If any competent authority for Tax purposes charges to Tax any sum paid
(the "ORIGINAL PAYMENT") to the Claimant under this Agreement the
Seller shall be obliged to pay to the Claimant such additional amount
(the "ADDITIONAL PAYMENT") as will ensure that, after the payment of
the Tax so charged on the original payment and any Tax chargeable on
the additional payment, there shall remain a net sum equal to the
amount of the original payment, such additional payment to be paid
three Business Days after the Purchaser has served notice that Tax on
the original payment has become due and payable, or would have become
due and payable but for the availability of a Relief.
7. CORRESPONDING SAVINGS AND REFUNDS
7.1 If the Seller makes payment in relation to any Tax liability under this
covenant or by way of discharge of a Warranty Claim for breach of
Warranty under the Agreement and such payment has given rise to a
Relief in respect of that payment (other than an Accounts Relief) for
the Target Company or the Purchaser which would not otherwise have
arisen, then to the extent that the liability of the Purchaser or the
Target Company to make an actual payment of or in respect of Tax is
reduced by reason of such Relief from the amount that such liability
would have been but for the availability of such Relief, the Purchaser,
if so requested by the Seller, shall, on the later of:
(a) the date when the Purchaser or the Target Company would have
been under an obligation to pay the Tax liability so reduced;
and
(b) the date when such reduction is agreed by the relevant Tax
authority,
make a repayment to the Seller of an amount equal to the lower of the
amount by which such liability is so reduced and the amount of the
payment referred to at the beginning of this paragraph made by the
Seller.
8. REPAYMENTS
8.1 If the Seller shall become liable in respect of any claim arising under
paragraph 2.1(b), credit shall be given to the Seller against such
liability for the amount referred to in paragraph 8.2 below which shall
be dealt with in accordance with paragraph 8.4 below.
8.2 The amount referred to in paragraph 8.1 above is the relevant
percentage of any repayment of Tax received by any of the Target
Companies from the Inland Revenue or any other Tax authority after the
Effective Acquisition Date but which is a repayment of Tax paid by any
Target Companies prior to the Effective Acquisition Date.
8.3 If the Purchaser receives such amount as is referred to in paragraph
8.2 above, it shall (or shall procure that the relevant Target Company
shall) promptly inform the Seller of that fact.
8.4 Where it is provided under paragraph 8.1 above that any amount (the
"RELEVANT AMOUNT") is to be dealt with in accordance with this
paragraph 8:
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(a) the Relevant Amount shall first be set off against any payment
then due from the Seller under paragraph 2.1(b) and reduce to
that extent the liability against which it is so set-off; and
(b) to the extent that there is an excess of the Relevant Amount
after any amounts have been set off under paragraph 8.4(a)
above a refund shall be made to the Seller of any previous
payment or payments by the Seller under paragraph 2.1(b) and
not previously refunded under this paragraph 8.4(b) up to the
amount of such excess; and
(c) to the extent that the excess referred to in paragraph 8.4(b)
is not exhausted under that paragraph, the remainder of that
excess shall be carried forward and set off against any future
payment or payments which become due from the Seller under
paragraph 2.1(b) and reduce to that extent the liability
against which it is so set-off.
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SCHEDULE 3
INTERPRETATION
1.1 In this Agreement (including its recitals and Schedules) unless the
context otherwise requires, words and expressions have the following
meanings:
"ALLIED GROUP" means the Seller, its subsidiary undertakings and any of its
associated companies from time to time and "MEMBER OF THE ALLIED GROUP" shall be
construed accordingly;
"ANSA SHARES" means the 1 Ordinary share in the capital of Ansa owned by the
Transferring Shareholder (representing 50% of the issued share capital);
"ASSETS" means any assets, real property or rights (but excluding intellectual
property and intellectual property rights) used by the business of any of the
Target Companies;
"AUTOCAR SHARES" means the 50,000 B Ordinary Shares in the capital of Autocar
owned by the Transferring Shareholder (representing 50% of the issued share
capital);
"AUTOLOGIC GROUP" means the Purchaser, its subsidiary undertakings and any
associated companies;
"AXIS" means Axis International Inc. a corporation incorporated in the State of
Georgia, whose principal office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇;
"BUSINESS DAY" means any day (except any Saturday or Sunday) on which banks in
the City of London and New York City are generally open for business;
"CLAIMS" means all and any claims or rights to bring a claim including, but not
limited to, any such claim or right in relation to any assets, real property, or
rights used by the business of any of the Target Companies, any rights over the
business or the development of the business of any of the Target Companies, any
rights in the intellectual property of any of the Target Companies, any business
or confidential information owned by any of the Target Companies (whether
historic, current or future), any management charges payable by any of the
Target Companies or any director's fees, salaries, bonus payments or other sums
payable to any director or employee of any of the Target Companies;
"COMPLETION" means completion of the sale and purchase of the Target Shares
pursuant to this Agreement in accordance with its terms;
"COMPLETION DATE" means the date which is the Business Day following the date on
which the conditions set out in clause 2 are duly satisfied or waived;
"CONFIDENTIAL BUSINESS INFORMATION" means all know how and information not
publicly known, that is used in or otherwise relating to the Target Companies or
to the business, customers, or financial or other affairs of the Target
Companies, (other than know how and information acquired or used by the Allied
Group by virtue of its other operations), including:
(a) trade secrets and equivalent information (including, but not limited to
formulae, processes, methods and knowledge) relating to the Target
Companies; and
(b) all information received or obtained by the Allied Group as a result of
the joint venture between the Purchaser and Axis relating to the Target
Companies and all information obtained by the Allied Group as a result
of entering into or performing this Agreement which relates to:
(i) the negotiations concerning this Agreement;
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(ii) the provisions of this Agreement; and
(iii) the subject matter of this Agreement;
"CONFIDENTIALITY LETTER" means the letter defined in clause 19.4;
"CONSIDERATION" means the sum of US$20,560,001;
"DEED OF RELEASE" means the deed, in the agreed form, to be entered into by the
Royal Bank of Scotland plc, the Purchaser, the Seller and the Transferring
Shareholder, to be delivered by the Purchaser to the Seller on Completion in
accordance with clause 7.2;
"EFFECTIVE ACQUISITION DATE" means 1 October 2001;
"FIRST AMENDMENT DEED" means the deed dated 14 July 2000 between the Purchaser,
the Seller, Axis and Royal Bank of Scotland;
"ICTA 1988" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"PRE-SALE DIVIDEND" means the dividend of (pound)3,500,000 paid to the Seller by
Ansa after the Effective Acquisition Date but before the date of this Agreement;
"PROCEEDINGS" means any proceedings, suit or action arising out of or in
connection with this Agreement;
"PRINCIPAL DEED" means the deed dated 14 May 1999 between The Royal Bank of
Scotland and the Purchaser;
"PURCHASER'S SOLICITORS" Lovells of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"SELLER'S SOLICITORS" ▇▇▇▇▇▇ ▇▇▇▇▇ Sapte of ▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"TARGET COMPANIES" means Autocar, Ansa and VLC and "TARGET COMPANY" shall mean
any one of them;
"TARGET SHARES" means the Ansa Shares, the Autocar Shares and the VLC Shares
agreed to be transferred to the Purchaser on and subject to the terms of this
Agreement;
"TAX" has the meaning ascribed to it in Schedule 2 and "TAXATION" shall be
construed accordingly;
"TAX COVENANT" means the covenant set out in Schedule 2;
"TRANSFERRING SHAREHOLDER" means Axis;
"VLC SHARES" means the 30,720 ordinary shares in the capital of VLC owned by the
Transferring Shareholder (representing 32% of the issued share capital);
"WARRANTIES" means the warranties set out in Schedule 1 and "WARRANTY" shall
mean any one of them; and
"WARRANTY CLAIM" means a claim brought under any Warranty.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to this Agreement or any other document include
this Agreement or such other document as varied, modified or
supplemented in any manner from time to time;
(b) references to recitals, clauses and Schedules and
sub-divisions of them are references to the recitals and
clauses of, and Schedules to, this Agreement and sub-divisions
of them respectively;
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(c) references to any enactment include references to such
enactment as re-enacted, amended or extended on or before the
date of this Agreement and any subordinate legislation made
from time to time under it;
(d) references to a "person" include any individual, company,
corporation, firm, partnership, joint venture, association,
organisation, institution, trust or agency, whether or not
having a separate legal personality;
(e) references to the one gender include all genders, and
references to the singular include the plural and vice versa;
(f) any reference to indemnifying any person against any
circumstance includes indemnifying and holding that person
harmless on a continuing basis from all actions, claims,
demands and proceedings of any nature from time to time made
against that person and all losses, damages, payments, awards,
costs or expenses made, suffered or incurred by that person as
a consequence of, or which would not have arisen but for, that
circumstance;
(g) headings are inserted for convenience only and shall be
ignored in construing this Agreement; and
(h) the words "company", "subsidiary", "subsidiary undertaking"
and "holding company" have the meanings given to them by the
Companies ▇▇▇ ▇▇▇▇ as amended by the Companies ▇▇▇ ▇▇▇▇ and
"associated company" shall mean all entities in which a
company holds at least twenty five per cent of the issued
share capital.
1.3 The recitals and Schedules to this Agreement form part of it.
1.4 Any reference in this Agreement to a document being "in the agreed
form" is to a document in the form agreed between the parties and for
identification purposes only signed or initialled by them or on their
behalf on or before the date of this Agreement.
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Executed as a Deed ) /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
by ) -------------------------------------
ALLIED HOLDINGS INC. ) President and Chief Executive Officer
in the presence of: ) -------------------------------------
Executed as a Deed ) /s/ AutoLogic Holdings plc
by ) -------------------------------------
AUTOLOGIC HOLDINGS PLC )
in the presence of: )
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